IT Dept raids 40 locations, unaccounted income of more than Rs 2,000 Cr detected

New Delhi: The Income Tax Department carried out Search and Seizure action on 6 February at Hyderabad, Vijaywada, Cuddapah, Vishakhapatnam, Delhi and Pune. More than 40 premises were covered. The search action included three prominent infrastructure groups based in Andhra Pradesh and Telangana.

Investigations led to busting of a major racket of cash generation through bogus sub-contractors, over-invoicing and bogus billing. Several incriminating documents and loose papers were found and seized during the search. Emails, WhatsApp messages and unexplained foreign transactions were also unearthed during the search. Search operations were also carried out on close associates including a former personal secretary of a prominent person.

The search operations revealed that infrastructure companies had sub-contracted work to several non-existent/bogus entities. Preliminary estimates suggest siphoning of more than Rs 2,000 crore through transactions that were layered through multiple entities with the last in the chain being small entities with turnover less than Rs 2 crore to avoid maintenance of books of accounts and tax audits.

Such entities were either not found at their registered address or were found to be shell entities. Several such sub-contractors were controlled by the principal contractors with all their ITR filings and other compliances being done from the IP addresses of the main corporate office.

FDI (Foreign Direct Investment) receipts worth several crores in the group companies of one of the infrastructure companies was suspected to be a case of round-tripping of unaccounted funds.

Unexplained cash of Rs 85 lakh and jewellery worth Rs 71 lakh has been seized, and more than 25 bank lockers have been restrained.

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The ID Staff

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